Bulletin: China Merchants Bank To Shake Off Property Downturn, Investigation Of Former President

HONG KONG (S&P Global Ratings) Dec. 15, 2022--China Merchants Bank Co. Ltd. (CMB) can withstand pockets of stress emanating from China's weak economic recovery. The largest uncertainty over the next 12 months remains the investigation against its former president, the outcome of which could affect our view of the bank's creditworthiness. CMB (BBB+/Dev/A-2) appears to be operating as usual, as reflected by the bank's overall credit metrics this year. We project CMB's nonperforming asset ratio will remain largely stable over the next 24 months. The bank's nonperforming loan (NPL) ratio stood at 0.95% at the end of June 2022, and its ratio for special mention loans (SML) was 1.01%. This is the low end among major listed banks. We attribute

...December 14, 2022 HONG KONG (S&P Global Ratings) Dec. 15, 2022--China Merchants Bank Co. Ltd. (CMB) can withstand pockets of stress emanating from China's weak economic recovery. The largest uncertainty over the next 12 months remains the investigation against its former president, the outcome of which could affect our view of the bank's creditworthiness. CMB (###+/Dev/A-2) appears to be operating as usual, as reflected by the bank's overall credit metrics this year. We project CMB's nonperforming asset ratio will remain largely stable over the next 24 months. The bank's nonperforming loan (NPL) ratio stood at 0.95% at the end of June 2022, and its ratio for special mention loans (SML) was 1.01%. This is the low end among major listed banks. We attribute this mainly to the bank's diversified portfolio and prudent underwriting standards. CMB's NPL ratio for property development loans increased to 3.32% as of end-September 2022, from 1.39% as of end-2021. But the increase was partially driven...

Bulletin